What is Plastiq and how Does It Do It Work? Advertiser disclosure You're our first priority. Everytime. We believe that every person should be able make financial decisions without hesitation. And while our site doesn't contain every financial institution or product that is available We're pleased of the advice we provide and the information we offer as well as the tools we design are impartial, independent easy to use and cost-free. So how do we make money? Our partners compensate us. This may influence which products we write about (and the way they appear on our website) however it in no way affects our advice or suggestions which are based on hundreds of hours of study. Our partners cannot pay us to guarantee favorable review of their services or products. . What Is Plastiq and how Does it work? With a small fee, Plastiq lets you use credit or debit cards to pay bills that don't typically accept cards for payment. Written by Melissa Lambarena Lead Writer | Credit cards as well as debt Melissa Lambarena is a lead writer for the credit card team at NerdWallet. She has been enthusiastically covering credit card-related topics for over six years. Her prior experience includes nine years of experience as a content creator for several websites and magazines. Through her work, she aims to assist readers in extracting value from credit cards to meet financial goals like expanding their budgets, building credit, traveling to their dream destinations and repaying debt. She has a look at these issues as well as others in her Millennial Money column featured in The Associated Press. Her work has also appeared on The New York Times, Chicago Tribune, The Washington Post, USA Today and Yahoo Finance, among others. Melissa has a bachelor's degree in sociology from University of California, Los Angeles. University of California, Los Angeles. Dec 1st 2022, edited by Kenley Young Assigning Editor Credit scores, credit cards Kenley Young oversees the daily coverage of credit cards for NerdWallet. Before that, he was a homepage editor and digital content producer at Fox Sports, and before that , a front page editor for Yahoo. He has years of experience in both digital and print media. This includes times as a copy desk chief as well as a wire editor as well as an editor of the metro of the McClatchy newspaper chain. Email:
. Many or all of the items featured here come from our partners who pay us. This influences which products we feature and the location and manner in which the product is featured on a page. However, this does not influence our evaluations. Our opinions are entirely our own. Here's a list and . is an online service that lets people and companies use debit or credit cards to make payments to vendors that do not normally accept payment methods. In exchange for this convenience, Plastiq charges you a processing fee, which could be costly -- in December 2022 . And of course, if you're using a credit card and can't pay those bills on time, you'll incur interest at the rate that your card charges. But if you need some relaxation while you wait for your paycheck or windfall to come in, Plastiq could be cheaper than a higher-interest alternative like a or -- assuming you are able to pay the bill promptly, especially if you use the rewards credit card which can defray the processing fee. >> MORE: Plastiq: The basics Plastiq lets you make one-time or regular payments to pay for expenses like mortgage and utilities, daycare, homeowners association fees and other charges. You can add a debit or credit card into your Plastiq account, and then charge it in the amount of the bill and then Plastiq will pay the business on your behalf via an option that the vendor accepts: , or an old-fashioned paper check. (Checks can, for instance, be read to the vendor as coming from you, and not coming from Plastiq.) The customer does not need to have a Plastiq account to make payments. " Plastiq is a service that allows businesses and individuals to make use of credit or debit cards to pay for vendors who do not normally accept these payment methods. " Plastiq generally charges a 2.9% fee for debit and credit cards. Conditions apply. The service is compatible with Visa. Mastercard. American Express. Discover. . However, some credit cards come with restrictions on the kind of bills that you can pay via Plastiq. For example, Visa and American Express are not able to be used for mortgage payments through Bill Pay. . Plus, Chase recently unveiled a and it's not clear what consequences could have on transactions that are processed using a Chase card through Plastiq. The process begins by making a free account through Plastiq and then adding your debit or credit card information. You can add more cards and select one as your default. It is also necessary to add recipients, including the name of the vendor and their country. The information you provide will be stored within your accounts for later use. " Checks typically take eight days to arrive according to Plastiq's website So, make sure you have some extra time in your calendar to avoid making payments late. " When you want to make a payment, select your recipient's name, amount due as well as the payment method (ACH, wire transfer or check) and a date for the money to be received. You may also need specific information about the amount you're paying like, for example an loan amount for the mortgage or a unit number to pay the rent due on an apartment, etc. You can include additional information under the "memo" area. You can create a one-time payment or schedule them to run automatically. If you are a recipient who accepts cheques via postal mail, you might need to make the payment earlier than usual. Checks generally take 8 days to arrive according to the website of Plastiq Therefore, you should include padding on the calendar to avoid paying in late. Plastiq gives a breakdown of fees, in forms of money as well as an amount in percentage in the payment review screen before you complete your transaction. After you have instructed Plastiq to make the payment, you'll receive several email confirmations from the company along the process, including an acknowledgement of the initial transaction, a notice when a check is mailed to the vendor for the payment and a message once the recipient cashes the check. (If for some reason your payment cannot be completed, Plastiq will notify you.) Nerdy Tip Certain credit cards might not be compatible with third-party bill payment services. Before making a purchase, you should read your card's terms and conditions, or ask the issuer how (or what) the transaction will be processed. It might be treated as cash advances instead of a purchase. Plastiq states that it alerts clients and blocks transactions before they are considered cash advances. The costs For debit cards The helpfulness of charging a debit card via Plastiq is only limited. You'll get hit with the 2.9% processing fee that you'd be able to save by sending your personal check to the seller. (Plastiq used to charge just 1% for debit cards, but it increased the cost to match that on credit card transactions in the month of March.) If you're not looking to purchase personal checks, buy stamps, visit the post office, etc. If so, Plastiq can cut these costs for you. But, you must utilize the service only if it won't put you in danger of overdrawing your account. Credit cards are a much more appealing option because, in effect, Plastiq allows you to pay for bills prior to having cash in your account. In addition, floating the cash using a credit card in this way could be a cheaper alternative to other options such as cash advances. " Floating yourself the cash using the credit card this way is a potentially less expensive alternative to other alternatives like cash advances. However, it's definitely not without risk or cost. " However, it's not free of risk or cost. First of all the 2.9 percent processing cost might not sound like much but if you're using Plastiq to make a check for $2,000 in rent, it adds $58 to the total. Utilizing a rewards card that earns say, can reduce that fee, but you'll be hard-pressed to dodge it entirely unless you're claiming an incentive to sign up through the spending. If you are unable to afford to pay off that $2,058 charge in the course of your credit card's bill cycle, you'll be hit with the card's ongoing interest rate -- and rewards cards tend to have the highest annual percentage rates, many in excess of 20 percent. More Information: A Nerdy Tip Your credit card's can buy you time to keep from paying interest. The grace period is the window of time between the end of your billing cycle until the time the payment due. Grace periods do not apply to credit card cash advances however, they may be applicable with a service like Plastiq. Remember that if you carry a balance, your card issuer will cancel the grace period. The bottom line, Plastiq is a service that should be used in a strategic manner. It's a great way to hold in cash reserves when you need them in the short term, and it's fairly inexpensive in comparison to other options for cash in a hurry. But using it to pay bills you can't pay for in the first place will be costly and unsustainable after the revolving credit card rate starts to take effect. About the author: Melissa Lambarena is a credit card journalist at NerdWallet. The work she writes for has been featured on The Associated Press, New York Times, Washington Post and USA Today. On a similar note... Discover the perfect credit card for you. Whether you want to pay less interest or earn more reward points, the right card is out there. Answer a few simple questions and we'll narrow the selection for you. Explore even more in credit Cards Get more smart money moves straight to your inbox Subscribe and we'll email you Nerdy articles about the money topics that matter most to you along with other ways to help you make the most out of your money. Make all the right money-making decisions

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